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Ambiguous refers to a contract term that is reasonably susceptible to more than one construction.

Parol evidence[]

Parol evidence is properly admitted to construe a contract only when its language is ambiguous.

The decision whether to admit parol evidence involves a two-step process. First, the court provisionally receives (without actually admitting) all credible evidence concerning the parties' intentions to determine "ambiguity," i.e., whether the language is "reasonably susceptible" to the interpretation urged by a party. If in light of the extrinsic evidence the court decides the language is "reasonably susceptible" to the interpretation urged, the extrinsic evidence is then admitted to aid in the second step — interpreting the contract.[1]


  1. Winet v. Price, 6 Cal. Rptr. 2d 554, 557 (Ct. App. 1992). Despite the trial court's provisional review of extrinsic evidence, its determination of whether an ambiguity exists remains "a question of law, subject to independent review on appeal." Wolf, 8 Cal. Rptr. at 656; see also City of Hope Nat’l Med. Ctr. v. Genetech, Inc., 181 P.3d 142, 156 (Cal. 2008) (stating that contract interpretation is a question of law for the court “when it is based on the words of the instrument alone [or] when there is no conflict in the extrinsic evidence”).

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